What is the timeline for closing the sale to XOMA Royalty Corporation and how might that affect short‑term price volatility?

Timeline for the closing of the HilleVax‑XOMA transaction

The press release from Halper Sadeh LLC does not spell out an exact closing date, but the structure of the deal and the standard steps that follow a “sale‑to‑XOMA Royalty Corporation” give a clear picture of the expected timetable:

Bottom‑line: Assuming the shareholder vote is scheduled within the next two weeks and all required regulatory approvals are obtained without delay, the transaction is likely to close within 6–8 weeks of the announcement, i.e., by early July 2025. If the shareholder vote is postponed or additional regulatory scrutiny is required, the closing could slip into late July or early August 2025.

How the timeline may affect short‑term price volatility

1. Pre‑closing speculation (now → closing)

   • Volatility driver: The market will price‑in the cash component ($1.95) and the value of the contingent value right (CVR), which is uncertain until the “certain conditions” that trigger additional payments are met.
     
   • Typical effect: A moderate‑to‑high swing in HLVX’s share price as investors debate whether the $1.95 cash is a fair premium relative to recent trading levels and the expected upside of the CVR.

2. Shareholder‑approval window

   • Volatility driver: The proxy‑vote period often creates a “vote‑out” or “vote‑in” dynamic. If a sizable group of shareholders (e.g., activist or institutional investors) publicly opposes the deal, the stock can experience sharp, short‑term spikes either upward (if the deal is seen as undervalued) or downward (if the market anticipates a protracted legal battle).
     
   • Typical effect: Elevated bid‑ask spreads and increased trading volume during the 2‑week voting window.

3. Regulatory‑approval phase

   • Volatility driver: Any unexpected regulatory request (e.g., a FINRA review of the CVR structure) can temporarily stall the transaction, prompting a sell‑off as investors fear a delay or a renegotiated price.
     
   • Typical effect: Short‑term dips (5‑10 % on news of a hold‑up) followed by a rebound once the issue is resolved.

4. Closing day (mid‑June to early July)

   • Volatility driver: The actual cash distribution and the issuance of the CVR are the final steps. On the day of the closing, the stock will typically trade at a discount to the cash component because the CVR is not yet tradable and its value is still speculative.
     
   • Typical effect: Sharp, one‑day‑only price compression—often a 3‑7 % decline from the pre‑closing price—followed by a stabilization once the cash is paid and the CVR is recorded on the surviving entity’s books.

5. Post‑closing “CVR‑valuation” period

   • Volatility driver: After the deal, the market will focus on the contingent‑value‑right trigger events (e.g., achievement of certain revenue milestones, regulatory approvals of HilleVax’s vaccine candidates, or other performance metrics).
     
   • Typical effect: Medium‑term volatility (weeks to months) as analysts update the probability of the CVR paying out additional consideration. This is outside the immediate “short‑term” window but worth noting for investors who hold the CVR.

Bottom‑line Takeaway for Traders

Strategic implication: If you are a short‑term trader, the most volatile window is the closing‑day event (mid‑June to early July). Positioning a tight‑range trade around the $1.95 cash level, with a stop just beyond the anticipated CVR‑discount, can capture the price swing. For longer‑term investors, the key is to understand the CVR’s trigger mechanics—once those are clearer, the post‑closing volatility will taper off.